The definitions and relationships among these terms are often very confusing to everyone.
Crypto wallet Hot wallet Cold wallet Hardware wallet Non-custodial wallet custodial wallet Public Key Private Key Recovery seed phrase Password/PinDemystify crypto wallet terms
Firstly, how do you keep, send and receive your Cryptocurrencies? In Crypto Wallets! To put it simply, Hot Wallet is a crypto wallet that is connected to the internet whereas a Cold Wallet doesn’t connect to the internet.
Cold wallet are usually considered to be safer as it is not connected to the internet.
Cold wallet examples include Hardware wallet such as Ledger, Trezor etc. Hot wallet example include browser extension wallet such as Metamask, XDefi etc.
Non-Custodial Wallets means you are holding on to the Recovery Seed Phrase (you owned the crypto) whereas Custodial Wallets means you are not holding on the Recovery Seed Phrase (example when your Cryptocurrency are in an exchange).
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